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Cheque truncation (check truncation in American English) is a cheque clearance system that involves the digitization of a physical paper cheque into a substitute electronic form for transmission to the paying bank. The process of cheque clearance, involving data matching and verification, is done using digital images instead of paper copies.
A substitute check (also called an Image Replacement Document or IRD) [1] is a negotiable instrument that is a digital reproduction of an original paper check.As a negotiable payment instrument in the United States, a substitute check maintains the status of a "legal check" in lieu of the original paper check, as authorized by the Check Clearing for the 21st Century Act (the Check 21 Act).
The Check 21 Act took effect one year later on October 28, 2004. The law allows the recipient of a paper check to create a digital version of the original, a process known as check truncation, into an electronic format called a "substitute check", thereby eliminating the need for further handling of the physical document. The recipient bank no ...
A substitute check or cheque, also called an image cash letter (ICL), clearing replacement document (CRD), [1] or image replacement document (IRD), [2] is a negotiable instrument used in electronic banking systems to represent a physical paper cheque (check).
Paper checks were the norm for non-cash payment methods for many decades, banks still offer them (sometimes for free), and check payments are often the lifeblood for nonprofit donations (in my old ...
Even your bank account can benefit from a system of checks and balances. No matter the financial institution you use -- whether a traditional bank or credit union -- when you write a paper check ...
When you buy a big-ticket item like a car or make a large payment, such as a down payment on a house, you may be asked to pay with a cashier's check or certified check. These checks are less ...
The electronic cheque or substitute cheque was formally adopted in the US in 2004 with the passing of the "Check Clearing for the 21st Century Act" (or Check 21 Act). This allowed the creation of electronic cheques and translation of paper cheques into electronic replacements, reducing cost and processing time.